India's corporate revenue is estimated to have expanded by a robust 16–16.5 per cent year-on-year in Q2 FY27, with aggregate EBITDA margins holding broadly stable in the 18.2–18.6 per cent range, even as elevated input costs exerted pressure on downstream sectors, according to a report by Crisil Intelligence. The analysis, covering over 800 companies across 65 sectors — excluding banking, financial services, and oil and gas — signals continued earnings momentum despite a diverging cost environment.

Revenue Trajectory and Key Drivers

The 16–16.5 per cent year-on-year growth in Q2 FY27 follows a 17.4 per cent expansion recorded in Q1 FY27, suggesting a marginal deceleration but a sustained broad-based upturn. Sequential growth in absolute terms is likely to be marginally higher, according to the report, reflecting the impact of rising input costs on bottom lines.

Domestic demand reportedly remained a key pillar of expansion, with automobiles, power, metals, and consumer staples emerging as the largest contributors. Firmer commodity realisations and favourable currency translation effects also likely supported revenue expansion in select export-oriented sectors.

Sector-by-Sector Breakdown

Commodity producers appear to have benefited from stronger realisations and favourable supply-side dynamics, while several downstream and consumer-facing sectors reportedly absorbed a part of the input cost increase to protect demand and sustain volume growth.

Within the automobile segment, passenger vehicle revenue likely rose by nearly 24 per cent, supported by an expected 20 per cent growth in volumes, premiumisation trends, and a better product mix. The sector continued to benefit from demand momentum following the goods and services tax (GST) rate rationalisation, although that tailwind appears to have largely played out by the end of the quarter.

In IT services, reported growth was reportedly aided materially by currency depreciation, which boosted revenue in rupee terms for companies with significant dollar-denominated billings.

Margin Trends and Cost Pressures

The broadly stable aggregate EBITDA margin, according to Crisil Intelligence, likely masks a widening divergence between commodity producers — who benefited from stronger realisations — and commodity users, who faced margin compression from elevated energy and raw material costs.

Sehul Bhatt, Director at Crisil Intelligence, noted: 'Among sectors, automobiles and power were likely supported by domestic demand and volume growth, while metals appear to have benefited more from stronger realisations and favourable supply-side dynamics. Reported growth in IT services was also likely aided materially by currency depreciation. Meanwhile, elevated energy and raw material costs appear to have made cost recovery more challenging for downstream sectors.'

What to Watch in Q3 FY27

With input cost pressures persisting and the GST tailwind for automobiles fading, sustaining double-digit revenue growth into Q3 FY27 will hinge on domestic consumption remaining resilient and commodity price trajectories stabilising. The margin divergence between upstream and downstream sectors is a key risk variable that analysts and investors will track closely in the coming quarters.